I’ve come across a couple of news stories lately that cover an interesting turn of events for copyright owners.  Apparently, a number of vociferous members of the copyright police don’t believe in the saying “what’s good for the goose is good for the gander.”  This article from the Washington Post essentially sums up the issue:  companies seem to have run out of “real people” for their ads, so they’re “borrowing” images from sources like Flickr and personal blogs.  Indeed, in Fox’s case, not only did they borrow the image, they altered it to fit their commercial needs.

Apparently companies like Fox, Virgin Mobile, Microsoft, and HBO think nothing of violating the express copyright statements on sites like Flicker in which users have reserved certain copyright rights, and prohibited commercial use of their images.  In the case of Fox, the use of the image directly contradicted an express statement of copyright ownership at the bottom of the owner’s blog.

So what do I make of this?  First, it reinforces my impression that the Internet Intellectual Property debate (if there still is such a thing) continues to favor Big Intellectual Property.  As evidence of this point, you really need go no further than the fact that spokesmen for Fox, Virgin Mobile and Microsoft were all “unavailable for comment.”  Hmm.  If any of those companies were truly remorseful, I suspect they may have made a spokesman available to the Post.  Clearly, when Fox steals an image from a blog, it’s not a big deal.  However when you download the new season of Fox’s 24, the FBI needs to be involved.

Let me make one thing clear:  I don’t believe that Intellectual property infringement is acceptable for any reason.  However, my day-to-day experience with this issue leads me to believe that Big IP feels that there are no limits to their power.  Not a week goes by when, in my capacity as DMCA agent for some of my clients, a DMCA notice is withdrawn because someone from Big IP shot first, and asked questions later.  Who is the victim in that case?  Certainly not the copyright owner.  It’s the site owner whose site goes down for a couple of days while they try to straighten the dispute out with the IP owner, or their representatives, who, in many cases, have zero interest in moving quickly.

What should be done?  When sending a DMCA take down notice, copyright owners should be required to make a good faith effort to ensure that their statements are accurate, and should be liable for the statements made by their representatives.  The DMCA should be clarified so that the “penalty of perjury statement” applies to both the “good faith” statement of illegality *and* the statement of authorization.  While many courts have held that this is the case, most copyright owners and their representatives assert that it only applies to the statement of authorization. 

Making these changes would go a long way to reinforcing for Big IP that their actions, both as copyright owners, and as users, have implications.

A recent case filed by Dell against a number of domain tasters and their registrars attempts to hold the registrars liable for infringing some of Dell’s intellectual property.  The claims that are relevant to domain name registrars allege that at least 3 registrars created a chain of registrars who took advantage of the ICANN 5 day redemption period to profit off Dell’s trademarks.  Dell alleges that these registrars allowed domain tasters to redeem domain names at one registrar and subsequently register it at an affiliated registrar.  This would preserve the taster’s interest in the domain name, and allow the affiliated registrars to share in any click through revenue created by the registration of the name.

Without going into the technical legal arguments raised by this case, a suit against domain name registrars has serious implications for hosts and other internet infrastructure providers.  Dell’s arguments are very similar to copyright infringement claims made in the early days of the web:  that those who facilitated the infringement of the copyrighted work were liable as third parties since they facilitated the infringement, and profited from it through the fees they collected.  While the facts in Dell’s case are pretty sensational (a chain of registrars profiting off a nuance in ICANN rules), the case shows that transparent attempts to exploit legal loopholes, are often only temporarily successful.  In this case, setting up a chain of (allegedly) related registrars to profit off of a registered trademark merited a swift response from Dell.

So what does this mean for hosts and other Internet infrastructure providers?  The first lesson is that the doctrine of third party liability for intellectual property infringement is alive and well.  This means that you need to remain aware and vigilant about your business activities.  This vigilance is important particularly in the area of trademarks, where, unlike copyrights, there is no “safe harbor” for businesses who are simply links in the chain of bad acts of customers or third parties.  A second lesson relates to Domaining.  While initially a suspect business, domaining has become a legitimate part of the Internet.  Hosts and other Internet infrastructure providers need to be aware that registering domain names involves a different risk assessment than other business efforts.  Because domainers tend to be very creative in their business, and business creativity often requires a higher level of legal analysis, those who provide business services to domainers need to examine whether the processes and procedures they have put into place effectively isolate the risk that these new customers may pose to their business.  

The 9th Circuit, has held that the Communications Decency Act protects interactive service providers from claims based on state intellectual property laws. The court defined "state intellectual property laws" to mean any laws that conflict with federal intellectual property laws. So basically, those state laws that regulate copyright, trademark, patent, and other areas in which Congress has passed laws, are within the CDA.

This decision is important for hosts for two reasons. The first is that it reinforces the interpretation that when Congress passed the CDA, it intended to protect hosts, and other interactive computer services, from claims based on state law where Congress had spoken. As a result, it's a bit easier to create effective compliance strategies. Second, because it removes a claim that creative content owners have been using as a way of getting around the DMCA. Properly implemented DMCA compliance plans are the most effective way hosts have to protect themselves against allegations that they are responsible for infringement taking place on their servers. Without such a plan, hosts remain potentially liable for contributory infringement, which may carry treble damages.